UNIT 4 SELF HELP GROUPS AND MICRO

FINANCE
Structure
4.1 Introduction
4.2 Self Help Groups: Meaning, Formation and Norms
4.3 Models of Self Help Groups
4.4 Micro Finance: Meaning, Characteristics and its Importance
4.5 Self Help Group - Bank Linkage
4.6 Self Help Groups as Change Agents- Implications for Extension
4.7 Case Studies
4.8 Let Us Sum Up
4.9 Keywords
4.10 References and Selected Readings
4.11 Check Your Progress: Possible Answers

4.1 INTRODUCTION
You are aware that the Government of India has launched several development
programmes after independence. The programmes focused on improvement of
socio economic conditions of rural masses and improvement in the standard of
living through eliminationof poverty. Unfortunately, the approaches and strategies
of these programmes did not yield expected results in improvement of socio
economic conditions vis -a-vis poverty eradication. As a result of this, the
government and bankers targeting the poor and women self help groups ( SHGs)
to implement various activities in order to reach the desired ends and to attain
their objectives. In this context as an extension worker, you need to understand
various dimensions of SHGs and microfinance with related implications to
extension work. The micro finance and SHGs are closely related, interdependent
and considered as building blocks for women empowerment. In this unit, different
aspects of women SHGs, micro finance and their implications for extension are
discussed for your understanding.
After studying this unit, you should be able to
1) analyze the dimensions of self help groups and their role in development,
2) discuss the significance of micro finance, and
3) describe the knowledge of SHGs and micro finance in the fields of extension
and development work.

4.2 SELF HELP GROUPS: MEANING

FORMATION AND NORMS
SHG is a small autonomous, non political group of people living in the vicinity
/ neighbourhood and sharing common concerns, who come together voluntarily
to work jointly for their personal, social and economic development. SHG is a
group of 10-20 members who voluntarily associate themselves for common self Help Groups *d Micro
F i c e
concerns, mainly to eradicate poverty. All the members agree for common savings,
generate a conpon fund and utilize the same for their credit needs through a
management.

4.2.1 Objectives of SHGs

To provide a cost effective credit delivery system
To provide a forum for collective learning
To provide genuine democratic culture
To provide opportunities to imbibe norms of behaviour based on mutual
respect.
To provide a fm and stable base for dialogue
To broaden the pattern of asset provision
To foster entrepreneurial culture
4.2.2 Benefits of SHGs
Instant access to credit at low interest during crisis
Helps in reducing the dependence on money lenders
Culture of thrift and disciplined loan repayment
Helps meet production and consumption needs
Helps to invest in new / existing economic activities
Shift in the employment - from wage to self employment
Asset building
Improvement in health and nutrition status of the family and educational
status of the children
Improved knowledge on income generation activities
Awareness and access to different schemes - increased information access
Security
Gender inequalities reduced
Institutional framework.
Winning confidence of mainstream financial sector as credit worthy
institutions.
4.2.3 Formation of SHGs
There are three stages in SHG evolution:
i) Group formation
ii) Capital formation through revolving fund and skill development
iii) Income generating activities
Group Formation: Group formation is not a spontaneous process. External
agencies, individuals working with communities can act as a facilitator in the
formation of groups and its development. Self Help Promoting Institutions (SHPI)
plays a vital role in the initial stages of group formation. The external facilitators
I
Case Studies on Programme are generally Non-Governmental Organisations, social workers, village level
I Planning and Management workers, informal associations of local people, community based organisations,
government departments, banks, farmer clubs etc.

Fig. 4.1 Women SHG Members

They interact with the poor families especially women to identify the small
homogenous groups. The members regularly meet on a fixed time and date to
collect savings from members under the supervision of SHPIs. Thus, SHGs will
inculcate the habit of thrift and credit among the members, who generally belong
to the families of BPL.

Capital Formation through Revolving Fund and Skill Development: SHGs

are taught simple principles of accounting and facilitated to receive external
funds in multiples of their savings. SHPIs, bankers or donors are the sources of
funding for SHGs. The corpus consists of own savings and other external funds
(revolving funds, grants, loans). Small loans from corpus fund are given to needy
members. The loans are given to members on a participatory method during the
regular meeting etc. The loans have a definite repayment schedule, which is
usually of short duration. The funds thus are rotated among themselves. The
groups shall have a bank account to deposit the savings, revolving fund etc. The
group shall maintain certain basic records as well.

Income Generating Activities (IGA): SHG members take up different income

generating activities. SHPIs play an important role in taking up the suitable IGAs
by the members based on the skills.
 Self Help Groups and Micro
Fiance

4.2.4 Norms of SHGs

Any Self Help Group will have certain norms; help to function properly for
sustainability of SHGs. It is mandatory for any SHG to have certain byelaws
pertaining to
i) Objectives of the groups
ii) Meetings - time, periodicity
iii) Savings - amount, periodicity, rate of interest
iv) Credit - procedure for sanction, ceiling amount, purpose, rate of interest to
be charged, repayment period
v) Fines - defaulters in attending meetings, savings and credit repayment
vi) Leadership - election or nomination of leaders, rotation of leaders etc
vii) Personall social improvement - minimum literacy to be achieved, social
work to be done, convergence of facilities etc
The norms are further elaborated for your better understanding.
Meetings: The group decides the periodicity of the meetings and regular
monitoring, attendance of the meeting, punctuality of the members, disciplinary
action on errant members etc. Generally, each group meets at least once in a
month at a fixed time. Some groups meet twice a month to transact their business.
The meeting place may be the house of a leader, a common place, a temple,
panchayat building etc. Absentee members are liable for fine, which becomes
the part of corpus fund of the group.
Maintenance of registers: Each SHG maintain certain basic registers for effective
monitoring, accountability and transparency. The registers of SHGs include
Minutes book, Attendance register, Ledger book, Cash book, Bank pass book
etc. These registers are suggested by promoter (banker, NGO), which may vary
from place to place. The details of meetings, proceedings, attendance, member
wise savings and credit, bank transactions etc are verifiable from these registers.
The registers are maintained by a book - keeper (may be a literate member or
non member), who is paid monthly honorarium for maintaining these registers.
Pattern of leadership: Each group shall have leaders, who represent the group
matters in various platforms. The nomenclature of leaders varies from region to
region and state to state. The leaders are elected from the members on rotation.
Leaders aid to democratic function of the group. The purpose of rotation is to see
that the leadership qualities are developed among the members of the group.
However, the experience in Andhra Pradesh indicates that rotation of leadership
apparently take place on the prescribed manner. The same leaders continue to
hold the office and or influence the leadership.
Case Studies on Programme Awareness of group: The SHGs will create awareness among the members and
Planning and Management
empowerment of members takes place. The members will have to know the
purpose of group formation, activities and operations, savings, credits etc. The
members are expected to participate actively in the group discussion and decision-
making process. SHG helps to work as a cohesive group and will have
transparency in the transactions.

Group activities: Savings and credit are the two important dimensions of SHG
movement. Regularity in savings and method of dealing with defaulters are the
important features of savings. The credit function of SHGs is judged by decision-
making process adopted, credit requirement and quantum of loan sanctioned,
system of monitoring credit repayment pattern etc. The group has to monitor
their performance regularly.

4.2.5 Revolving of Fund

The SHGs to become eligible for sanction of revolving fund, community
investment fund etc they need to pass through certain stages.

Stage 1 (Grading of SHGs): The formation stage lasts for 6 months. It is

necessary to test whether it has evolved into a good group or not. This helps to o
understand the weaknesses of the group and to overcome such deficiencies.
Members also evaluate their own performance through a participatory approach.

Stage 2 (Capacity building of SHGs): It is a crucial stage to enhance the capacity

of groups and enables to receive the revolving fund, which become a part of
corpus fund of the group. The external fund received enhances the group capacity
to extend loans to the maximum. The expectation of the group during this stage
include: 1) gradual improvement of per capita loan, 2) shift from consumption
loans to production loans, 3) understanding the training requirements, 4) assessing
and ascertaining the reasons for poverty, 5) meeting the credit needs of the
members, 6) understanding the participatory monitoring of assets created through
loans extended to its members, 7) capable of understanding community action
programmes and continuing to do so independently and 8) reducing dependency
on outside facilitating agency.

Final stage (Taking up the economic activities): After the above two stages,
the group is eligible to receive assistance for economic activities in the form of
revolving fund or subsidy extended to the members and or group. Some members
are given loan and subsidy with the assurance of group as guarantor, which
monitors the repayment. Under SGSY, the subsidy component is about 50 % or
RS 1,25,000/-

4.3 MODELS OF SELF HELP GROUPS

There are three models adopted:
Cooperative Development Foundation ( CDF) model
Development of Women and Children in Rural Areas ( DWCRA) model
South Asia Poverty Alleviation Programme (SAPAP) model
By analyzing these models, you can get a comprehensive idea on the dimensions
of SHGs.
 Self Help Groups and Micro
4.3.1 Cooperative Development Foundation (CDF) model Finance
Lack of access to credit and higher interest rates are the important elements of
Cooperative Development Foundation model. Women Thrift Cooperatives are
tile basic units in CDF model. The adult women can become a member,
irrespective of her economic status. Members have to save Rs 201- per month
and earn 1% interest on her savings. However, she will be charged 2 per cent
interest on the loan amount. Savings is the basis for loan amount and thus credit
is linked to savings. Each member is eligible for credit to the extent of three
times of her savings. Women Thrift Cooperatives are the focal points in village
credit market for thrift accumulation and thrift linked credit with minimum interest
rate. The WTC leaders monitor the loan repayment, saving collection, and
C- disbursement of loans. Two guarantors are required for loan sanctioning. Loan
Insurance Fund (LIF) scheme takes care of the risk of bad debtors due to death of
any member. The WTCs federated into Association of Women Thrift Cooperatives
(AWTC) for better functioning of WTCs. The model included poor and non-
poor members; lacks the focused target. The CDF model is a model of untargeted
Micro Finance Institution (MFI).

4.3.2 Development of Women and Children in Rural Areas

(DWCRA) model
Development of Women and Children in Rural Areas (DWCRA) as a government
programme started during the year 1982-83and also known as government model.
The main objective of the programme is to provide self-employment opportunities
on a sustained basis for rural women. The women of neighbourhood can become
the members with similar socio economic background. The size of the group
varies between 10 and 15 members. These women take up different income
generating activities according to their skills and availability of resources.
DWCRA model banks upon training in leadership, attitudinal change and skill
for income generation. An amount of Rs 25,000 provided to each group for
undertaking different economic activities. This grant is a common fund, recouped
and recovered periodically. Under IRDP, individual or group can also provided
subsidy and loans from the banks. The groups mobilise monthly savings which
is utilised for inter lending to meet the consumption needs of their members.
The programme focuses on the improvement of health, education, childcare,
nutrition, water and sanitation. Organisation of women into groups will result in
their bargaining power and power to resist exploitation. In this process, llinkages
are established with government line departments, financial institutions, and
corporate agencies. Economic and social empowerment is the bottom line of
this model.

4.3.3 South Asia Poverty Alleviation Programme (SAPAP)

Model
This programme was assisted by UNDP (United Nations Development
Programme) consequent to Dhaka declaration of SAARC countries on poverty
eradication in 1993. SAPAP model contemplated the process of social
mobilization as an institutional mechanism to mobilise the poor into self-help
groups. This leads to collective empowerment at the grass root level. The
collective body facilitates them for better access of public resources and services.
The empowerment model has three components - social mobilisation, capital
formation and capacity building of the poor. These components help the poor to
Case Studies on hogramme overcome their poor conditions by removing the obstacles that perpetuates
Planning and Management
poverty. SAPAP implemented in collaboration with local NGOs and state
government. This is also a micro finance plus model.

Table 4.1 :Comparison of Different Models

members Poor are eligible

Activity 1: Visit your nearest two Self Help Groups and find out the models
followed and compare them.
Activity 2: Discuss with the members of women self group about the benefits
and ill effects derived after joining the group and compare the benefits given in
the unit.
Check Your Progress 1
Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What is a SHG? Indicate salient features of SHGs.
2) Enlist the objectives of a SHG Self Help Groups and Micro
Finance
.......................................................................................................................

.......................................................................................................................
3) What are the different models of SHGs?
.......................................................................................................................

4.4 MICRO FINANCE: MEANING,

CHARACTERISTICS AND ITS IMPORTANCE
Micro fiancC defined as the provision of thrift, credjt and other financial services
and products in very small amounts to the poor for enabling them to raise their
income levels and improve living standards. It is the provision of very small
loans that are rapid within short periods and is essentially used by low-income
individuals and households. Micro finance is enabling, empowering, and bottom
up tool to poverty alleviation that has provided considerable economic and non-
economic externalities to low income households in developing countries.
The major characteristics of micro finance are :
Very small amounts of loans are provided;
Credit follows thrift;
Short repayment period;
No ceiling on maximum and minimum loan amount;
Interest rate is flexible, unlike commercial banks; and
Generally rural and urban households and more so women are the target for
micro finance.
4.4.1 Micro Finance Movement in India
The micro finance movement in India was formally launched on a pilot basis by
the National Bank for Agriculture and Rural Development (NABARD) in 1992.
The formal financial institutions in India have not reached the poor households,
particularly the women in the unorganised sector. Rigidities in the structure and
overheads lead to high cost of making small loans. Further, the poor were not
regarded as credit worthy. Low level of influence of the poor about either credit
worthiness or their demand for saving services further aggravated the problem
of the poor.
Case Studies on Programme Micro credit is a financial innovation that originated with the Grarneen Bank in
Planniig and Management Bangladesh. It has successfully enabled extremely impoverished people of
Bangladesh to engage in self-employment projects that allow them to generate
an income and, in many cases, begin to build wealth and exit poverty. Due to the
success of microcredit, many in the traditional banking industry have begun to
realize that these microcredit borrowers should more correctly be categorized as
pre-bankable; thus, microcredit is increasingly gaining credibility in the
mainstream finance industry. Many traditional large finance organizations are
contemplating microcredit projects as a source of future growth, even though
almost everyone in larger development organizations discounted the likelihood
of success of microcredit when it first began.

A multi agency rural credit delivery structure comprising of Commercial banks,

Regional Rural Banks and Cooperative banks was established across the country,
but it was difficult for this structure to meet the credit requirements ( small,
frequent) of the poor. Complicated systems and procedures of banks also resulted
in large section of poor keeping away from the formal banking sector. On the
other hand, rapid expansion of bank network threatened its viability and at the
same time they cannot keep the poor outside their fold. The need for alternate
mechanism for catering the financial service needs of the poor has emerged.

4.5 SELF HELP GROUP - BANK LINKAGE

The micro finance scene in India is dominated by SHG - Bank linkage. The
primary aim of the SHG - Bank linkage programme is to integrate informal
savings and credit groups with mainstream banking system by providing credit
facility to groups to enhance their fund base. In this direction, the financial services
of banks started routing through SHGs. Thus, a link was established between
informal groups (SHGs) and formal financial institutions (banks) for catering
the financial needs of the poor. This network helped the banking sector to extend
their outreach to the poorest of the poor. NABARD played a crucial role in
establishing an effective and strong SHG - Bank linkage programme. The linkage
programme focuses on developing credit delivery services for the poor; building
a mutual trust and confidencebetween bankers and the poor; encouraging banking
activity both on thrift as well as credit and sustaining a simple and formal
mechanism of banking with the poor. Reserve Bank of India provided policy
support to SHG - Bank linkage that allowed banks to open savings accounts,
relax interest rates, margin security etc necessary for SHGs. SHG-Bank linkage
programme became the largest and fastest growing finance programme in the
world.

SHG - Bank linkage resulted in inculcating the habit of savings supplemented

by borrowing to meet the needs of members. SHGs are developed into micro
credit network for promoting the socio economic betterment of women.
Community based participatory approach and sustainability of SHGs resulted in
making SHGs as financial intermediaries to reach the poor. SHG to become
qualify under bank linkage programme, it should satisfy certain characteristics
such as
Group should have been in active existence for minimum of six months
Group should have successfully undertaken savings and credit operations
from its own resources
 Evidence of democratic set up in the group where members have a say in all self Help Groups and Micro
Finance
matters
The group should be maintaining proper accounts / records
The banker should be convinced that the group has not come into existence
only for the sake of participation in the project and availing benefits
There should be a genuine need to help each other and work together among
the members.
Positive impacts of micro finance programme on women empowerment
include
Women's ability to influence or make decisions improved
Increased self confidence
Improved family relations
Improved status in the community
Economic empowerment
Political empowerment
Limitations
Burden of time consuming meetings
Additional stresses and pressures are introduced which might increase
vulnerability and reflect disempowerment
Reinforcement of traditional gender roles - remain trapped in low
productivity sectors.
1 Activity 3: Visit a Regional Rural Bank and understand the dimensions of I
I micro finance and SHG- Bank linkages. Write your observations. I
4.6 SELF HELP GROUPSAS CHANGE AGENTS-
IMPLICATIONS FOR EXTENSION
SHGs can act as change agents as an organized group involved in different
livelihood activities - agriculture, animal husbandry, horticulture. The extension
workers of different line department can easily influence SHGs for wider
disseminationof information/ technologies. In states 1ikeAndhraPradesh, Tamil
Nadu, the SHG are federated into a definite structure thus making the task of
extension worker easier in transfer of technology to a large number of people.
Capacity building of these groups in the identified livelihood activities and
developing the members as master trainers further enhances the effectiveness of
extension outreach activities. Over a period, the approach of extension also
changed from individual to group, thus concept of SHG falling in line with
extension. As an extension worker you to need understand and work with the
groups. The study of SHG will help us to understand the various dimensions of
groups, the factors contributing to the success of these groups etc. The SHG is a
classical example to illustrate various extension principles - gross root
organization, participation, needs etc. One of the important features of SHGs is
organization of the monthly meetings of SHGs / Village Organisations, which
help the extension workers to develop these groups into front line extension
agencies in disseminating the information1technologies on a regular basis.
Case Studies on Programme Check Your Progress 2
Planning and Management
Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What do you understand by Micro finance? How micro finance is important
in poverty alleviation?. Explain.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) Discuss the SHG - Bank Linkage in women empowerment.
.......................................................................................................................
.......................................................................................................................

4.7 CASE STUDIES

Following case studies may help you to analyze the different aspects of SHGs
and Microfinance to strengthen the concepts learned in the earlier sections of the
unit.

Case Study -1
The approach and thinking of individuals vary according to the situation. The
followingcase study is an example of the approach of women in different difficult
circumstances. Positive thinking gives a good result; illustrated in the following
case study.

Raja Ellarnma, 55 years old Schedule Caste woman of Nawabpet mandal of

Warangal district of Andhra Pradesh had one son and two daughters. Since her
husband is a chronic patient, she is the main bread winner of the family. Her
livelihood is daily wage labour. Because of poverty she sold her % acre land to
perform her daughter's marriage. It was very difficult for her to meet the day to
day medical expenditure of her husband coupled with children's education, being
the sole earner of the family. In spite of all these difficulties, she supported her
children. She settled her son with a good job in the town, but it did not fetch
anything for her. After few days she lost moral support of her husband and became
a single woman.

At that point of time she came to know about Self Help Groups and inspired by
the philosophy. Then she started mobilizing the members for starting a SHG
She was very successful inmotivating other women and formed a group with 10
members, named as Indira Self Help Group. She started saving a rupee a day, Rs
30 /- per month. After few days with the support of SHG, she performed marriage Self Help Groups and Micro
Finance
of her second daughter. Unfortunately her daughter was sent back by her husband,
as she did not fetch any dowry. Ellamma was pushed into the problems again,
but this time she did not lose her confidence and moved forward.

Andhra bank sanctioned loan of Rs 1,50,000/-for taking up of dairying activities

by Indira SHG, but the members are interested in agriculture and expected
land from the Govt. Bank enforced dairying but the members started neglecting
animals, as they are not interested in dairy. Many of them could not repay the
loan as most of the animals died. All members started claiming insurance from
the bank. Members were informed that the claims would be settled only after
they repay the loan. It became a heavy burden on the SHG to repay the loan and
interest. Members started to withdraw from SHG and it became defunct finally.
But Ellamma with all difficulties she utilized the loan properly and repaid to
bank in time. Again she performed second marriage to her deserted daughter and
moulded her life properly.

This is the difference between her and other members , Ellamma had positive
mindset to change her life and her daughter's ,by properly utilizing the resources
with a great thinking. Therefore, SHG paved the way for economic empowerment
and at the same time interest of members and capacity building at appropriate
time is most important for sustainability of a group.

Case Study 2
The success mantra of a group is based on perseverance and endurance. The
Rama Bhai Self Help Group of Narona Village of Gulbarga district of Karnataka
had shown the path for success. This SHG had 21 members belonged to poorest
of poor, working as agricultural labourers but the constant drought restricted
their wage earning.

One day all the members discussed about betterment of their livelihoods. They
got an idea to take land for lease and to take up cultivation. They took 6 acres
land for lease for Rs 35,000 for two years and paid an advance Rs 5000 advanced
from SHG corpus fund. They started agriculture on their own with the support of
Bailuseema Rural Development Society. They invested Rs 3,000 for land
development and Rs 5,000 towards sowing of red gram, sunflower, maize and
bajra. All were engaged in all agriculture activities.

They worked for 3 10 man days that is equivalent to Rs 10,000 worth of labour.
The total expenditure worked to be Rs 18,000 ( Rs 10000 as labour + Rs 3000
for land preparation + Rs 5000 towards seed, integrated pest management etc.)
At the end of the season, they earned Rs 47,000. Out of which Rs 30,000 repaid
to land owner and Rs 5,000 credited back into SHG account. Out of remaining
of Rs 12,000, Rs 8000 was converted into working capital and Rs 4,000 credited
into their SHG account.

The profit earned from the agriculture was not distributed among members and
instead used as working capital for the next season. It clearly illustrated that
members had a future vision of improving their income in the subsequent years.
Here we saw the unity, desire for the betterment, decision - making ability,
increased productivity is some of the factors contributed for their success. The
success transformed agricultural laborers to into farmers.
Case Studies on Programme Case Study 3
Planning and Management
Achieving success in the first instance is very difficult, as there might be several
obstacles. Success might elude unless determined efforts made repeatedly. The
key is to try several times without being disappointed in finding out the hurdles
and ways to remove them. Where there is a will there is a way. Coordinated and
determined efforts make it possible in overcoming the disappointment.
Mallaiah SHG had 11 members; all belonged to poor families. In spite of their
meagre income levels, they save money and very prompt in repayment of loans.
However, they have a common social problem i.e., male members of their families
were addicted to alcohol, as a result much of their earnings spent on alcohol.
They faced hardship in repayment to SHG and embarrassment from others due
to their husband's addiction to alcohol consumption. One day all SHG members
discussed the issue and decided to keep a check on alcoholism. The thought
different alternatives, one such alternative is to force their husband to quit alcohol,
but sceptical that their husbands does not heed to their request. The other
alternative is that alcohol should not be available in the village. Therefore, they
have chosen the later alternative and started working on it.
The next day they prevented the entry of alcohol carrying vehicle into their village
by threatening the driver. Their success lasted for 2 days only, the next day the
driver appeared along with alcohol, accompanied by liquor contractor. The
contractor patiently heard to SHG members and promised that he will withdraw
his business if he gets back the deposit of Rs. 15,000 paid to Government. The
members were in dilemma and thought that why should they pay Rs 15,000 to
the contractor. They could not resist any more and the business continued.
This case study emphasizes that mere concern for the issue does not bring the
success, but proper planning and pooling the support from all quarters is essential
to achieve the objective. The mustering of support of other SHGs and thorough
thinking on the alternatives should have brought the success.

4.8 LET US SUM UP

In this unit, we understood the importance, meaning and genesis of self-help
groups with reference to the women empowerment. The structural and functional
dimensions of women self-help groups were thoroughly analyzed for better
understanding. These include group formation, norms of the groups, and models
of SHGs etc. Later we briefly discussed the relevant indicators for evaluation of
performance of a group and characterization of WSHGs in South India, which
made us to understand the differences in the profile as well as the dimensions of
WSHGs. The second important part of the unit was on micro finance and its
role in empowerment of women through SHGs. We understood the importance
of SHG- Bank linkage in the micro finance and the impact on the women
empowerment. The case studies presented in this unit further enriched our
knowledge and understanding on the Self Help Groups, their micro finance
activities and their implications to extension.

4.9 KEYWORDS
Empowerment : It is defined as giving power to create power
'within' and 'enabling'. It is strengthening the
 capacities achieved through full participation self Help Groups and Micro
Finance
of people in various processes.
Self Help Group : An Self Help Group is a small autonomous, non
political group of people living in the vicinity /
neighbourhood and sharing common concerns,
who come together voluntarily to work jointly
for their personal, social and economic
development.
Micro Finance : Micro finance is enabling, empowering, and
bottom up tool to poverty alleviation that has
provided considerable economic and non-
economic externalities to low income
households in developing countries.

4.10 REFERENCES AND SELECTED READINGS

Krishnan.C. (2000), Role of Rural Banks in the Rural Development, Printwell
Publishers, Jaipur.

Misra,I. (2004), Micro Credit for Macro Impact on Poverty. National Publishing
House, New Delhi.

Mukundhan.N., Soundari, .M.H. (2008), Emerging Dimensions in Self Help

Groups, Dominant Publishers and Distributors ,New Delhi.

Purushottam.P. (2009), Institutional Credit for Rural Livelihoods - -4 Study of

SGSY in the Regions of High Poverty, National Institute of Rural Development,
Hyderabad.

Rajareddy, K., and Krishnamurthy, J.V. (2006) Swayam Sahaya Sanghalu - Velugu
Needalu- Case Study Analysis, APMAS, Hyderabad

Singh, B.K. (2006),Women Empowerment Through Self Help Groups, Adyayan

Publishers, New Delhi.

Sreeramulu, G (2006), Empowerment of Women Through Self Help Groups,

Kalpaz Publications, Delhi.

4.11 CHECK YOUR PROGRESS: POSSIBLE

ANSWERS
Check Your Progress 1
1) SHG is a small autonomous, non political group of people living in the
vicinity / neighbourhood and sharing common concerns, who come together
voluntarily to work jointly for their personal, social and economic
development. SHGs are characterized as a) Voluntary nature b) Small group
structures, c) Mutual assistance & accomplishment of special purposes, d)
Formed by peers / promoting agencies, e) satisfying a common need etc.
2) The major objectives of self help groups are - a) to provide a cost effective
credit delivery system, b) to provide a forum for collective learning, c) To
61
Case Studies on Programme provide genuine democratic culture, d) to provide members with
Planning and Management opportunities to imbibe norms of behaviour that based on mutual respect.
e) to provide a firm and stable base for dialogue, f) to broaden the pattern of
asset provision, and g) to foster entrepreneurial culture.
3) The three important models adopted by Self Help Groups- 1) Development
of Women and Children in Rural Areas (DWCRA) model, 2) South Asia
Poverty Alleviation Programme (SAPAP) model and 3) Cooperative
Development Foundation (CDF) model.
Check Your Progress-2
1) Micro finance is the provision of small loans and essentially used by low-
income individuals and households. Micro finance is a enabling,
empowering, and bottom up tool to poverty alleviation that has provided
considerable economic and non-economic externalities to low income
households in developing countries by providing short-term credit very
frequently and timely to meet their daily needs such as food, agriculture,
educational of children, health, family functions etc.
2) Micro finance in India played a significant role of SHGs- Bank linkage.
The primary aim of the SHG - Bank linkage programme is to integrate
informal savings and credit groups with mainstream banking system by
providing credit facility to groups. Hence, this link has established between
informalgroups (SHGs) and formal financial institutions (banks) for catering
the financial needs of the poor.